Alongside proposed increases in income tax the Chancellor has announced increases in National Insurance Contributions (NIC) will be increased by 0.5% across the board from April 2011.

This means that employers’ contributions will be increased to 13.3% and the main rates for employees and the self employed will be increased to 11.5% and 8% respectively. The additional rate for those who earn in excess of the upper earnings limit will also be increased by 0.5% to 1.5%

This is part of a package of proposed tax increases to help fund the short term measures announced elsewhere in his report.
 

• Email This
• Print
• Comments
• Trackbacks

This year’s Finance Bill is close to gaining Royal Assent and the Chartered Institute of Taxation (CIOT) has already submitted its “wish list” for the 2009 Budget. One of the suggestions put forward is that income tax and National Insurance Contributions (NIC) should be merged into one tax. Failing that “radical” change, the CIOT suggests that there should be further alignment between the two taxes.

The wish list forms part of a submission by the CIOT to Dave Hartnet the acting head of HM Revenue & Customs. Other items on the wish list include:

• A Statutory Residence Test,
• A small benefits exemption (£25) so that trivial employee benefits are tax free and need not be reported,
• An “Elderly Care Vouchers” exemption based on the current Child Care Vouchers system,
• An extension of the Gift Aid system to include non-UK charities, and a similar extension for inheritance tax purposes, and
• A suggestion that the proposed “income shifting” provisions, currently postponed until next year should be “quietly dropped”.
  

Full details of the CIOT’s submission can be found here

• Email This
• Print
• Comments
• Trackbacks

Please find below a blog which you might find of interest from my colleague Cathy Corns, who writes for our sister blog SME Plus...

HMRC has published new guidance on the new penalty provisions that will apply from April 2008.

HMRC states that it has designed the new penalties so that:

• If people take reasonable care when completing their returns they will not be penalised.
• If they do not take reasonable care errors will be penalised, and the penalties will be higher if the error is deliberate.
• Disclosing errors before HMRC find them will substantially reduce any penalty due.

The new penalties initially apply to VAT, PAYE, National Insurance, Capital Gains Tax, Income Tax, Corporation Tax and the Construction Industry Scheme.

Further information can be found at:
http://www.hmrc.gov.uk/about/new-penalties/penalties-leaflet.pdf
http://www.hmrc.gov.uk/about/new-penalties/faqs.htm

• Email This
• Print
• Comments
• Trackbacks